Credit Card Types Explained

The world of the flexible friend has moved somewhat since the days when choice essentially meant Access or Barclaycard.

Barclaycard do, of course, still offer a credit card facility but it is available in either Visa or MasterCard, as are those cards offered by seemingly countless other issuers. Today one can choose between Capital One, MBNA, More Than, Mint, Egg, Citi Finance, cards issued by various stores such as Tesco and Sainsbury – and that is to name but a few.

It is true to say that most credit cards operate on a similar principle to one another, that being of course that you buy now and pay later, along with a certain amount if interest if full payment is not made within a certain number of days. However, within those parameters there is sometimes a surprising amount of difference as the various service providers compete to offer you the best and most attractive deal. One incentive that is often provided is an offer of 0% APR for a set period. This gives the card user the freedom to use the card as he or she sees fit safe in the knowledge that no interest will be added provided full payment is made sometime within the lifetime of the promotion period.

As well as providing useful spending options these terms might also tempt the holder of another, interest-bearing card to transfer their deposit to the 0% card.

Similarly most issuers offer special deals on balance transfers at different times. Thus if a card user is paying interest at a certain APR they will, by transferring that balance to another card with a balance transfer offer, be able to pay the outstanding balance at a reduced rate of interest. Many cardholders in fact minimise their repayments by moving balances around between cards to take advantage of every offer that comes their way.

A separate approach entirely is the issuing of rewards or points depending upon how often a cardholder uses their card and how much indebtedness that person accrues. These points can then be converted either into cash or into goods, depending upon the offer at hand.

An altogether different type of card is the credit repair card, sometimes called a bad credit card. This card is available to discharged bankrupts and others who have experienced financial difficulty and is a useful means through which they may begin to rebuild their creditworthiness in the eyes of potential lenders. Sometimes these are prepaid so that no credit is actually offered, but nonetheless they do provide the cardholder with a means of demonstrating some responsibility in the handling of a card.

These then are the various credit card types explained. There will of course be others, as issuers look for increasingly original ways through which to provide incentives and to give themselves a head start over their competitors. Compare the leading credit card deals above and find your best credit card deal online today.